Efatora

Blog/July 13, 2026·3 min

ZATCA Phase 2 in Saudi Arabia: what you need to know in 2026

With Wave 24 (threshold lowered to SAR 375,000, deadline June 30, 2026), Fatoora integration now covers nearly all VAT-registered taxpayers. A verified overview of the phases, waves and technical requirements.

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Saudi Arabia runs one of the most advanced e-invoicing regimes in the world. Its tax authority, ZATCA (Zakat, Tax and Customs Authority), rolled the reform out in two phases — and the second has just reached a decisive milestone. Here is the state of play, verified against ZATCA's official announcements.

Phase 1: generation (since December 2021)

Since December 4, 2021, all VAT-registered taxpayers in Saudi Arabia must generate their invoices electronically: no more handwritten invoices — invoices must be produced by a compliant system, with a QR code on simplified (B2C) invoices.

Phase 2: Fatoora integration (since January 2023, in waves)

Since January 1, 2023, ZATCA has been progressively mandating integration: the invoicing system must connect directly to ZATCA's Fatoora platform. In practice:

  • B2B tax invoices follow a clearance model: they are transmitted to Fatoora and validated before being delivered to the customer;
  • simplified B2C invoices are reported to ZATCA within 24 hours;
  • the required format is structured XML (UBL), with hashing, signing and a tamper-evident counter.

Integration rolls out in waves, defined by VAT-liable revenue. ZATCA notifies each wave at least six months before its deadline.

Wave 24: the 2026 turning point

Announced by ZATCA on September 26, 2025, Wave 24 targets taxpayers whose VAT-liable revenues exceeded SAR 375,000 in 2022, 2023 or 2024, with an integration deadline of June 30, 2026.

That threshold matters: SAR 375,000 is also the mandatory VAT registration threshold. In other words, with Wave 24 the integration obligation now covers virtually all VAT-registered businesses — small ones included. If you are only discovering the topic in 2026, the question is no longer "am I in scope?" but "am I already late?".

Commonly misunderstood points

  • There is no mandatory "accreditation" of software vendors. ZATCA publishes an indicative list of solutions, but the taxpayer remains responsible for the compliance of their own system. Software absent from the list can be compliant; software on the list does not exempt you from verifying.
  • Compliance is technical, not declarative. Chained invoice hashing, cryptographic signing for B2C, a compliant QR code, timestamps: these requirements are tested, not asserted.
  • A support programme exists for small businesses. ZATCA has run a subsidy initiative for e-invoicing adoption by small enterprises (turnover up to SAR 3 million). Check the current conditions directly with ZATCA before counting on it in your budget.

What to do now

  1. Check whether your 2022-2024 revenue places you in a wave that has already passed — as of June 30, 2026, that is the case for most VAT-registered taxpayers.
  2. Verify that your solution generates the required UBL XML and handles the clearance/reporting flow.
  3. Test against the Fatoora simulation environment before going to production.
  4. Watch ZATCA's official announcements: ZATCA, and ZATCA alone, defines the waves and deadlines.

Sources